Trump Ignorantly Thinks the Stock Market Reduces Government Debt

Jake Tapper uses Harvey Weinstein scandal to bash Trump and Sean Hannity

The Republican tax plan unveiled last week calls for as much as $6 trillion in tax cuts that would sharply reduce federal revenues.

He told Sean Hannity, "Now, if you look at the stock market, that's one element, but then we have many other elements. Possibly picked up the whole thing in terms of the first nine months, in terms of value". And maybe in a sense we're reducing debt. "And we're very, very happy".

Please note: This is a commentary piece. But what he is saying is not so unintelligible as a lot of people are taking it to be. What matters is whether the government has a debt it can reasonably service. Trump is expected to take the stage inside a hangar at the Air National Guard base at the Harrisburg International Airport Wednesday evening prior to the TV interview.

If the economy grows, the debt can grow too, and that's fine.

And it's absolutely the case that the national debt increased by $9 trillion during President Barack Obama's time in office, but many were scratching their heads at Trump's implication the debt was lessening because markets are increasing in value. The stock market has nothing to do with the debt. "I'm the king of debt".

But higher stock prices reflect corporate profits.

Earlier Wednesday, Trump vowed that the stock market and employment would "grow by leaps and bounds" if Congress passes tax cuts he is proposing.

Trump also overreads the 3.1% second-quarter GDP growth figure, about which he brags constantly.

Trump seems not to know any of that. In the policy area where Trump has taken the most action - immigration - his actions are likely to push growth downward. "They are going up, and some are already finished, and I will say they are really looking good".

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